>> i think b. of a., while it's not necessarily going to try and get to the size of a regional player. it's going to streamline. it's going to really get a better handle on what it is as a company. >> tom: a major makeover for the nation's largest bank-- bank of america announces thousands of job cuts. >> susie: the news comes just as the president sends his jobs plan to congress. it's "nightly business report" for monday, september 12. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:

this program is made possible by contributions to your pbs station from viewers like you. thank you. captioning sponsored by wpbt >> tom: good evening and thanks for joining us. susie gharib is off tonight. i'm joined by my colleague suzanne pratt. suzanne, bank of america confirmed today it's planning a massive cost-cutting effort, including big layoffs. >> susie: tom, b. of a. c.e.o. brian moynihan said today that he's trying to reshape the nation's largest bank after a series of missteps. the restructuring plan is called "project new b.a.c." it will slash 30,000 jobs from its consumer banking businesses. the goal is save $5 billion a year by the end of 2013. >> tom: is this the right medicine for ailing b. of a.? and what will it mean for the

bank's competitors? erika miller reports >> reporter: whether it's the number of kids in a classroom or the amount of calories in a meal, bigger is not always better. bank of america believes the same rule applies to banking. the firm plans to trim operations in order to become more focused and more efficient. it's a smart strategy, says analyst moshe orenbuch, whose firm does business with bank of america. >> absolutely! it is! what they are trying to do is get out of things that aren't integral to what they are about. this is not about, you know, cutting a third of their branches. it's about cutting out activities that aren't adding to what is bank of america. >> reporter: though the shares rose a bit today, they have still lost more than a quarter of their value since august 1 in

spite of significant changes the past few weeks. there was a management shake-up, including the departure of well- known executive sallie krawcheck, a $5 billion dollar investment by warren buffett, and $15 billion in asset sales. but, as analyst jim leonard explains, none of these efforts has addressed the major concern of investors. >> there's an issue about whether or not they are going to raise capital, and almost all of that is driven from the potential mortgage losses from lawsuits, from fraud claims, that are overhanging the company. >> reporter: he estimates losses could be up to $40 billion dollars, roughly a third of the bank's capital. that raises the question of whether bank of america needs an extreme makeover-- like carving out its countrywide mortgage unit for a chapter 11 filing, spinning off merrill lynch or creating a litigation trust to deal with its mortgage liability. credit suisse believes what's needed is patience. >> we have an outperform rating on bank of america. the idea is that we do think it can earn in the neighborhood of $2/share by 2013 and get to, or

slightly above, its tangible book value of $12.65. price target is $14. >> reporter: you may be wondering if the cost-cutting at b. of a. will mean deeper cutbacks at other big banks. most analysts say it's unlikely, unless the u.s. economy takes a serious turn for the worse. erika miller, "nightly business report," new york. >> tom: bank of america's move to cut jobs comes at the same time president obama is trying to get companies to add jobs. the president sent his $447 billion jobs bill to congress today. he says the american people need help now, urging congress to pass the bill with "no games, no politics, no delays." >> we know what will help businesses start right here and stay here and hire here. we know that if we take the steps outlined in this jobs plan, that there's no reason why we can't be selling more goods all around the world that are

stamped with those three words-- made in america. >> tom: meanwhile, house majority leader eric cantor suggests a fight may be brewing over the jobs bill. he says the president can't simply say, "it's my bill.. all or nothing." >> suzanne: a late session comeback for the major averages helps wall street shake off its latest round of european jitters. behind the turnaround in u.s. stocks? a "financial times" report that china is considering buying italian debt. the dow turned a triple-digit loss into a 69-point gain. the nasdaq rose 27 and the s&p 500 added eight points. trading volume started the week about the same as friday, with just over a billion shares moving on the big board and holding above two billion on the nasdaq. once again, it was europe that set the tone on wall street today. u.s. investors are worried that greece is edging closer to a default as that country's debt problems seem impossible to resolve.

on top of that, concerns about a possible moody's downgrade of french banks added to the day's uncertainty. don't forget french banks are big holders of greek bonds. and, many experts say the u.s. is not insulated from the eurozone's financial problems. economists say europe's crisis could push the already fragile american economy into recession. joining us now with his take on today's market action is nick colas, chief market strategist at convergex group. nick, you have to apologise or i have to apologise, there is a lot of noise behind me, i'm at the new york stock exchange and there is a party tonight. maybe there should have been a party because of the turn around in the last half hour of trading. let me start with that. is there reason to believe that china would step in and buy italian bonds? >> it's hard to know if they would or wouldn't but i think it's a really important example of how nervous the market is

overall. agency about the greek problem and other sovereign debt worries. and what kind of really low quality information can rally the markets. because really it was nothing more than a single news report unconfirmed that moved the market 100 points, as you pointed out. >> do you think that the u.s. stock markets throughout the next several weeks and months is going to be continue to be dictated by european trade and european action or whatever is going on over there. >> yes, absolutely. i think the near-term concern is over the survivability of the euro, do any countries have to fall out of the euro, for example greece. and then what the economic conditions are and some of the weaker-- weaker countries in the european union and there i point to italy, spain and portugal. so there is a whole raft of concern, none of which had any near-term catalyst resolution. >> so what is it that u.s. investors are so worried about with respect to europe? >> they are worried about two things. the first is that roughly 25% of s&p 500 company earnings come from europe. so if europe goes through a recession obviously earnings

estimates were too high, u.s. companies will make less than they otherwise would. and they're worried about u.s. stocks for that reason. the second is a level of contagion. and that's a fancy word that basically says that the european banking system begins to unravel, does it affect the u.s. banking system as well. >> so if greece actually defaults as anyone will expect it will, what kind of reaction do you think we will see in u.s. stocks? >> i think that the greek default if it does occur is largely discounted in stocks at this point. but i do think that the market will then begin to think okay, who's next. if grease has gone, is italy safe is portugal safe s spain safe. and it will really set off a domino affect of worries about different economies. so even though we do have i think largely discounted greek situation, othering are not yet discounted and there is a lot of uncertainty and worry based on what happened in 2008. once the first domino falls. >> so what is the best way to play this market. is it just about cash? ness. >> primarily it is about

cash, at this point for investors whose risk appetite doesn't really hold with the kind of volatility that we are seeing, a lot of folks fall in that camp, then i say being in cash or being modestly invested is the way to go. for investors that do want to be in equities and high quality dividend paying companies with long track records of good dividend payments and a good dividend yield r a good safety backstop, what are still going to be a volatile market wath. about bonds, quickly. >> bonds i think are probably okay to own because there is not a worry about big growth and therefore higher inflation. so the bonds of either sovereign nations that are safe such as the u.s. or high-grade corporate debt are also safe as well. >> what about positives. we are have been talking about negatives. are there if i good things potentially on the horizon that would change your feeling about buying equities right now? >> absolutely. i think the thing that we aren't talking about very much in the capital markets of late is just how strong corporate earnings continue to be. corporations are not signaling if they are going to have to guide down their

expectations to analysts in future quarters. we are going to start seeing q3 earnings get reported in october. so basically five or six weeks away we'll be reminded again that u.s. companies have done a great job cutting costs, managing their bottom line, adding to cash on the balance sheet, maintaining conservative balance sheets and that will be the offsetting positive. unfortunately we will not get that news for another month and the european news really soaks up a lot of investor attention. >> and it will be refreshing to get some good news. thank you so much for joining us and coming back on the program. it's always a pleasure to you have. >> tau some of. >> we've been speaking with nick colas of convergex group. >> tom: still ahead, with all the volatility across the pond, tonight's "word on the street?" "europe." a look at exchange-traded funds focused on europe. the fall harvest is underway across the corn belt, but those fields may yield fewer crops than expected. the government surveyed corn fields a little over a week ago and today said this year's harvest could be the smallest since 2005.

as diane eastabrook says, hot weather is getting the blame. >> reporter: corn traders were expecting bad news about the u.s. corn crop, and this morning the government delivered it. the u.s.d.a. predicted farmers will harvest a little more than 148 bushels of corn per acre this year. that's about five bushels short of last month's estimate. while you'd think news like that would send prices higher at the beginning of trading, they fell instead. trader scott shellady says the market was expecting a jolt, but got a bump instead. >> we had talked about a 148 yield before. that's been a whisper number. that was in the public domain and in our business. once something is in the public domain and your brain has had time to digest it, then it doesn't act as well as a surprise. >> reporter: corn prices have been heading higher in recent weeks because of dry weather across much of the midwest. those higher prices have prompted some livestock producers to replace corn with cheaper feed grains for their herds. jack scoville, a vice president for price futures group, says

$7-plus corn is affecting the export market as well. >> i know that many of my buyers down in latin america who buy u.s. corn are looking at all of the alternatives that they possibly can, just because the corn prices are so high. >> reporter: agriculture commodities have become popular with investors as demand for food from developing countries like china has soared. even though today's government report didn't send grain prices through the roof, trader shellady says hold on-- the harvest has just started. >> the only real way we're going to know what the size of this corn crop is going to be is when the trucks finally go across the scales. >> reporter: by this time next month, analysts say they should know just how bountiful and how expensive this year's corn crop will be. diane eastabrook, "nightly business report," chicago. >> suzanne: it looks like warren buffett has a new golden child. the berkshire hathaway c.e.o. today hired little-known hedge- fund manager ted wescheler. wescheler will work with todd combs managing part of berkshire's massive investment

portfolio, and the two will run those investments when buffett retires. the company said, with both men on board, "berkshire is well- positioned for successor investment management at the time mr. buffett is no longer c.e.o." here's the most interesting part of the story: wescheler paid to have lunch with buffet after winning the billionaire's annual charity luncheon two years in a row. tom, clearly he impressed buffett with more than just his table manners. >> obviously with that investment in that auction lunch lots of return on that investment for that investment manager, no doubt about it, suzanne. you mentioned the late day comeback on the markets with nick. let's get rolling with tonight's market focus. the day began with big european worries washing ashore again here in the states, but by session's end, the major indices ended in the green. let's look at the day's trading for the dow jones industrial average.

here's where we were at all day long. the index stayed in the red throughout most of the day, hitting its low when germany said it was looking at all possibilities for greece. the dow finally popped into positive territory less than 10 minutes before the closing bell. nice gain of 69 points. it was technology that helped the market tone today, thanks to some merger activity and value investors. this is the cubes exchange- traded fund, following the nasdaq 100. up more than 1% today, continuing in a range between $50 and $55. intel led the dow industrial gainers, up 3%. tonight's close matches the late august rally high. the semiconductor maker holds a developers' conference this week and may update its outlook. at least analysts are hoping. among the big tech sector gainers? chip maker micron and design software firm auto-desk were up more than 5% each.

u.b.s. added micron to its most preferred stock list, thinking memory chip prices have bottomed. another semiconductor maker is on this list-- altera rallied 4.5%. a chipmaker also is involved in the merger in technology. broadcom will buy net-logic microsystems for $3.7 billion. net-logic shareholders will get $50 per share. the deal expands broadcom's lineup for wireless networking chips-- technology sold to cisco systems, alcatel-lucent and others. the buyout offer fueled a big rally for net-logic, up more than 50%, closing just shy of its takeout price. broadcom, the buyer, lost about 1%. speaking of corporate deal- making, mcgraw hill confirms what some shareholders have been pushing for-- a split. one company will hold its standard & poor's ratings and indicies business while the other will be concentrated in textbook publishing.

how about the share price? activist shareholders began making noise for a split-up last month. that helped push the stock up from the mid 30s to the low 40s. today it was up 4%, closing at just over $40 per share. the break-up will be tax-free and completed by the end of next year. the company's current c.e.o., terry mcgraw, will lead the credit and market indices business. the european worries earlier in the day hit metal prices. silver fell more than 3%. it remains over $40 an ounce. gold dropped 2.5%, its lowest price since late august. some metal analysts say investors are raising cash, especially european investors, after recent price rallies. copper sank to a one month low over worries about global economic growth. the world's biggest copper miner reported some order cancelations from european and american customers.

putting the lid on metal prices a stronger u.s. dollar also has helped keep metal prices from rising. as the euro-zone problems persist, the dollar has rallied. this is the dollar index. it hit its highest level since late february during the trading day. and that's tonight's market focus. >> tom: the troubles brewing in europe have taken their toll here in the states, but in europe, some countries' stock indices are at their lowest level since the financial crisis more than two years ago.

that brings us to tonight's "word on the street," europe. glenn hall is the editor in chief at thestreet.com. glenn, with the european stock markets down some of, are there opportunities especially for value investors here? >> well, there's two ways to play right now. especially looking at the ets. there are some country specific funds that are down 10, even 20%. and if you think that there's good times to come after the greek crisis gets resolved, those that might have opportunities to buy while they're down, upswing opportunity later. the second might be to continue shorting, short those country indices and you pite have an opportunity to see further upside if the recovery takes longer than expected. >> clearly the trouble in the european markets isn't confined to the specific countries in trouble, in greece and italy. one of those specific country etfs you brought along here is the french exchange traded fund, ewq is the ticker symbol on this one. down about two and a quarter percent today, down 16% over the past couple of months at

a new 52-week low. clearly lots of french concern here. >> yeah, the french took a hit today because there's reports it that moody's is prepare tolling downgrade major french banks like paribas, society general and so forth because of their exposured to greek debt crisis. as a result people are now keenly aware that france may take a hit as well as contagion fears spread. >> you compare that movement today down to a 52-week low, down -- compared to the germany exchange rate, down just a fraction, yes down another 52-week low. but on a price basis, much less for the downside at least today. >> yeah, that tracking the german shares seems to be responding to germany more neutral position, the chairman in this whole bailout drama and germany has been hesitant, balancing its own domestic needs against the needs to help out the rest of europe. so right now investors are a little less sure where germany will come out so they came out with a more or

less break even today. >> maybe less business exposure, more policy exposure as the case may be. >> i think that's the case. >> you talked about shorting europe and maybe units, if you don't think the downside is in. the proshares ultra shore europe fund this is twice the opposite of a broad european stock index meaning if it's down 1%, this fund would be up 2%. what's the opportunity here? >> well, what we've seen is with that french index that we talked about before and this short european index, there used to be exact opposites where the french index was going up and this one was going down. they flipped recently and this one has been rocketing higher. so if you are looking to hedge or you think that europe is going to have long-term trouble this is an opportunity to get in and it's a get against a short term recovery for europe or greece. >> tom: and twice the volatility as well. dow own any of these funds, glenn. >> i do not own any of these funds. >> tom: you can read his article, a link to it on our

web site, our guest glenn hall with thestreet.com. >> suzanne: here's what we're watching for tomorrow: quarterly results from best buy and neiman marcus. in washington, the so-called super committee holds its first public hearing on the nation's debt. and, we continue to pose the question, "how do we fix?" we'll talk to john kanas, the president and c.e.o. of bank united, about turning the economy around by helping small business. opec is slashing its forecast for oil demand as the global economy slows. the cartel cut this year's estimate by 150,000 barrels a day, and next year's by 40,000 barrels a day. opec says the u.s. summer driving season was weaker than expected, and that the economies of many industrialized nations are slowing. opec produces a third of the world's oil supply. south wist airlines faces a 1.1 million fine over faulty repairs and kppings over 44 plains.

the federal aviation administration says a contractor for the company failed to fully expect the planes for metal fat agency and did not properly install pieces that hold the aircraft skin in place. back in airport you will recall a hole was ripped open in the roof of a boeing 737 operated by southwest. the plane had to make an emergency landing. thank three all 118 people on board were okay.

>> suzanne: in tonight's commentary, what's better-- a growth- or macro-focused economy? with the answer, and an explanation, here's tim kane, senior research fellow at the kauffman foundation. >> washington's economic policy debate is stuck, not in partisan gridlock, but in the wrong economics textbook. the talk is almost exclusively about macroeconomics. what's missing is growth economics. fiscal policy has focused on the most basic macro model of keynesianism, known by the identity "y = c+g+i+nx." this model justifies the increase in "g" to 20% of g.d.p. after a recessionary decline in c. monetary policy is, by definition, macro economics. should there be a qe3 to boost investment? macroeconomics, for better or worse, is a study of the

business cycle, while its policy objective is stability, softening the troughs and peaks. growth economics is all about the long-run trend line. a recent paper by stanford economists paul romer and charles jones summarizes the state of growth econ. washington should note that among the six stylized facts are the importance of market scale and human capital for growth. most interesting is that population and per capita income growth have been accelerating over human history. since 1820, u.s. income per capita has grown by a rate that accelerates roughly 0.1% every decade. but you have to wonder, have we peaked? i'm tim kane. >> tom: just a reminder: you catch us online at nbr on pbs.org. there you'll find all the market data from the program, and you can watch any programs you may have missed. >> suzanne: finally, a new

approach to selling newspapers. the publisher of the "philadelphia inquirer" and the "philadelphia daily news" is offering discounted tablet computers to new subscribers. they go on sale tomorrow for $99 with a two-year digital subscription to one or both papers. tom, the tablets will be offered first-come, first-served to those who buy the company's four apps. >> as a home town philadelphia girl i'm happy to see any reason for anybody to buy the philadelphia enquirer. >> tom: absolutely. and those apps don't stain your finger with the ining-- inning on them. >> true. that's nightly business report for monday, september 12th. i'm suzanne pratt, good night, everyone. good night to you too. >> tom: have a great evening. i'm tom hudson. thanks for joining us this evening and we'll see you right back here tomorrow night.

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